Britain votes to leave EU; Markets dive; Prime Minister Cameron to resign

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(CNNMoney) — Britain has voted to leave the European Union, a shock development with profound implications for markets and economies around the world.

Here’s what you need to know:

1) The results are in: After a long night of vote counting, the final results have been issued: 51.9% of voters chose to leave the EU, while 48.1% wanted to remain.

2) Markets are an absolute bloodbath: A massive decline in bank shares helped push London stocks down by 8% at the open. The FTSE 100 has since clawed back some ground to trade around 4% lower.

The pound plunged close to $1.33, its lowest level in more than 30 years, as the results of the referendum became clear. It’s now trading down 9% at below $1.38.

Dow futures are down 450 points. In Asia, Japan’s Nikkei tanked 7.9%, and Hong Kong’s main index dropped 2.9%.

3) A frantic search for safety: The price of gold has spiked as investors pour money into perceived safe havens. Others to watch include U.S. Treasuries, the Japanese yen and Swiss franc.

4) Cameron out: Prime Minister David Cameron, who campaigned against an exit, has announced that he will resign. Without offering a detailed timetable, Cameron said a new leader would be installed by October.

5) Appeals for calm: The Bank of England is under immense pressure to keep markets and banks operating in an orderly manner. In a statement, the central bank said it would “take all necessary steps to meet its responsibilities for monetary and financial stability.”

Officials and regulators in other countries around the world are also preparing for fallout. South Korea’s government has called an emergency meeting, while others have called press conferences or issued statements.

6) How did this happen? Cameron promised voters in 2013 that he would allow a referendum on whether Britain should remain in the European Union. At the time, the chance of exit appeared to be low. But the campaign — which focused heavily on immigration and the economy — revealed deep fissures in Britain along both political and geographic lines.

7) The big questions: Britain’s decision to exit the EU has injected huge amounts of uncertainty into markets. At this point, investors have more questions than answers — will the U.K. be able to negotiate new trade deals? How long will that take? Will global banks seek to move their operations out of London?

8) The big takeaway? This isn’t a one-day event. The repercussions of the vote to leave are only just beginning, and it has the potential to upend Europe’s established political order.

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2 comments

  • Andrew

    This is a good thing. The market drops are simple panic over the unknown, which is to be expected. Once everyone realizes that the sky is not falling, remembers that Britain is still an economically viable country with a lot to offer, and comes to terms with the fact that globalization is simply not mathematically viable, things will stabillize and grow again.

    This is also good for the US. If we can negotiate trade deals with the UK now, while the pound is weak, we will be in a much better position later when the pound has recovered. But it will take a president who can lead, negotiate business deals, and a Congress which is both willing and able to do its job. We have the chance to get the first one in November, along with the chance to light a fire under the latter by voting out every single incumbent up for re-election in Congress, Democrat and Republican alike. Members of Congress are not supposed to agree with eachother. That is part of the reason Congress exists in the first place. But they are supposed to be able to work with eachother productively in order to execute the business of this nation. Our current Congress has not been able to do that for a long time. It takes them a year and a half to pass an annual budget. They refuse to even speak to eachother on the important and difficult issues, and instead make a huge show out of fighting tooth and nail over the little stuff in order to appear like they are working hard “for us”. But nobody is buying it.

    Britain just had a 72% voter turnout, and the people there took their country back. That should be an enormous encouragement for us in this country. If we had even a 35% voter turnout, we could take our country back as well. Apathy never won anything for anyone. People have got to start caring again, and caring enough to at least vote. Otherwise we will continue this horrible slide into dictatorship, and be unable to choose for ourselves what we want. Freedom will perish. Don’t let that happen. It doesn’t have to, either. Whether you are a Democrat, Republican, or Independent, the successful campaign of Donald Trump is proof for us all that every vote still matters, and that our votes can still change things. If we care enough to do that. So come November, we can either resign ourselves to more of the same, being driven down a path toward homogeneity, globalization, and dictatorial servitude, or we can clean house and throw out not just the executive power elite, but the legislative power elite as well. We can send a message that we the people are still here, that we will not be ignored or slighted, and that we are fed up with the criminal job that our current electorate is doing. Running a country the size of the US is incredibly hard. It requires a lot of people doing a lot of very difficult things. If we are to stay together as a union, we can not go on as we have been. It has got to change, and it has got to change from the top down. We, the people, are the only ones who have the power to do that. But we have to care about it enough to actually do it.

    I care enough to use my vote to send as many of them packing as my vote allows. To start over, with a completely new Congress, to send a message that this is the 21st century and the old way of conducting Congressional business will no longer be tolerated. We no longer have time for sit ins and filibusters that last days. We no longer have time for a Congress that does not work 40 hour weeks, 48 weeks out of the year. We no longer have time for partisan gamesmanship or back room dealing. We no longer have the luxury of bowing to foreign interests on things. We no longer have the tolerance for catering to the needs of big business. And we, all of us, are fed up with Congress dodging the job of legislation that we rely on them to be doing. They exist to keep the judicial and executive branches in check through legislation. A big part of why the other two branches have gotten so screwed up lately is because Congress has been so disfunctional that it can not even legislate a simple balanced budget, let alone legislate power balances. A clean sweep is what this country needs. Let’s show the Brits that when it comes to freedom, as momentous a show of patriotism as the Brexit referendum is, they have got nothing on us.